Growth in consumer markets is driving the sack and kraft paper market to $80 billion by 2021

Steady growth in consumer markets will buoy the sack and kraft paper industry to produce growth of around 3% per annum for 2016–2021 – according to the latest exclusive data from Smithers Pira. This will push global market value to $80 billion in 2021, up from $66 billion in 2016.

Report author Stephen Harrod notes that environmental concerns are also helping transform this industry. He says: “Adoption of sustainability practices has been fairly widespread throughout much of the kraft and sack paper industry and many suppliers now sport a plethora of environmental certificates in various forms. As environmental pressures become ever greater, it is possible that kraft and sack paper manufacturers may start to develop entire product ranges marketed on a sustainability platform.

“In addition to sourcing from sustainably-managed forests, some kraft paper producers have also made attempts to increase the amount of recycled material used in the manufacture of their products.”

Operating in parallel pressure to reduce costs is leading to technological advances that now enable much lighter weights of paper to achieve the same results. Grammages are declining significantly in some cases from 55gsm to as low as 20gsm. This shift to lighter weights increases the importance of sheet uniformity, bulk and thickness, absorbency, opacity, dimensional stability, surface finish, printability – as well as reducing volume offtake for raw material suppliers.

The reduction in volume caused by downgauging is, however, mitigated by the trend to smaller pack sizes, as smaller packs tend to use more material to hold the same contents. This trend also increases the demand for other consumables – such as inks and adhesives – adding more value to the sack and kraft segment for packaging converters. This evolution is being driven by demographic changes worldwide, where there is a general increase in single parent families and smaller family units. Such downsizing is also being supported by health and safety concerns, with many 50 kg industrial packs being reduced to 25 kg content weights for this reason.